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Zacks Industry Outlook Highlights: McDonald's, Brinker International, Panera Bread, AFC Enterprise and Krispy Kreme Doughnuts



 Zacks Industry Outlook Highlights: McDonald's, Brinker International, Panera
               Bread, AFC Enterprise and Krispy Kreme Doughnuts

PR Newswire

CHICAGO, Feb. 6, 2013

CHICAGO, Feb. 6, 2013 /PRNewswire/ -- Today, Zacks Equity Research discusses
the U.S. Restaurants, including McDonald's Corp. (NYSE:MCD), Brinker
International Inc. (NYSE:EAT), Panera Bread (Nasdaq:PNRA),AFC Enterprise
(Nasdaq:AFCE) and Krispy Kreme Doughnuts, Inc. (NYSE:KKD ).

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

A synopsis of today's Industry Outlook is presented below. The full article
can be read at  

Link:  http://www.zacks.com/commentary/25745/restaurant-stock-outlook-feb-2013

The year 2012 started on a relatively positive note for U.S. restaurants. That
scenario changed gradually as sales momentum slackened in the sector as the
macroeconomic tension, presidential election and the "Fiscal Cliff" raised
uncertainties in the market.

Even this year, the industry remains on the receiving end of global economic
concerns, fragile consumer confidence, a more expensive food cost environment
in the U.S., a sluggish labor market, "Obamacare" and an excess of restaurants
in the industry. As a result, we anticipate subdued store sales growth in the
medium term.

Statistics also bear out this relatively unfavorable environment. A recent
survey by the National Restaurant Association revealed that the Restaurant
Performance Index (RPI), measuring the present condition and outlook on the
U.S. restaurant industry, was 99.7 in December, down 0.2% sequentially. The
figure dropped from the steady-state score of 100.

The Current Situation Index, which measures comparable store sales, traffic
count, labor costs and capital expenditures in the restaurant industry, was
99.1 in December, down 0.7% sequentially. This was the fifth below-100 score
in six months and the lowest level in almost two years. However, the
Expectations Index, which measures the restaurant operators' six-month outlook
on the above indicators, was 100.3, up 0.3% from November.

This RPI number connotes that the industry is stressed. Weak sales momentum, a
sluggish labor market and slowdown in capital spending suppressed the Current
Situation Index.

The Expectations Index managed to beat the safety threshold of 100 for the
first time in three months, but the score still reaffirms operators' bearish
outlook on the industry over the near term.

Performance of Key Players in Fourth-Quarter 2012

So far, industry behemoth McDonald's Corp. (NYSE:MCD) delivered
stronger-than-expected results in the fourth quarter while another renowned
operator -- Brinker International Inc. (NYSE:EAT) -- posted in-line earnings.
However, most of the company's results are yet to release.

A look at the Earnings ESP (Expected Surprise Prediction - Zacks' proprietary
methodology for determining which stocks have the best chance to surprise with
their next earnings announcement) shows that the overall earnings picture for
the industry remains mixed. To beat the estimate, a stock needs to have both a
positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks
Rank #1, #2 or #3.

Among the leading players of the industry, Panera Bread (Nasdaq:PNRA),AFC
Enterprise (Nasdaq:AFCE) and Krispy Kreme Doughnuts, Inc. (NYSE:KKD ) will
likely beat fourth-quarter earnings.

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